Policy: Budgets & Deficits

New York City mayor unveils budget, warns of labor contract challenges

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Associated Press,Labor,New York,New York City,Budgets and Deficits,Bill de Blasio

NEW YORK — New York City Mayor Bill de Blasio unveiled his first budget proposal Wednesday, revealing that the nation's largest city has a surplus but warning that it still faces stark fiscal challenges due to the expired labor contracts of all 150 municipal unions.

De Blasio, whose events in the early weeks of his administration have often resembled campaign-style rallies, this time delved into the gritty details of government, saying that his primary focus in the $73.7 billion preliminary budget includes universal, full-day prekindergarten; an inspector general for the NYPD; and enforcement of the paid sick leave law.

He also revealed that he would restore $1 billion to the city's Retiree Health Benefits Trust Fund, a rainy-day reserve that was on track to be exhausted by his predecessor, Michael Bloomberg. De Blasio also would place an additional $600 million into other general reserve funds over the coming years.

That money could be used to begin contract negotiations, but de Blasio would not commit to the proposal Wednesday. Many of the unions have been working on expired contracts for up to six years and all have asked for retroactive raises, which could carry a price tag of up to $7 billion.

De Blasio repeatedly criticized Bloomberg for letting the contracts lapse before leaving office, saying the situation was "not appropriate."

"We've already said before this is unprecedented," de Blasio said. "To say it is unprecedented only begins to explain the depth of the problem."

A spokesman for the former mayor declined to comment Wednesday. Many of the unions declined to negotiate with Bloomberg, believing that that the economy would improve and that they would find a friendlier face in City Hall after the three-term mayor left.

De Blasio has not committed to giving retroactive raises. Negotiations have slowly begun with some of the unions though de Blasio could not say Wednesday whether they would all be completed this year.

The head of a coalition of unions praised the surplus but warned that difficult negotiations could be ahead.

"Though it is important that surplus money is being set aside," said Harry Nespoli, head of Municipal Labor Committee, "the actual amount does not reflect any agreement with the city's unions on what is necessary to resolve the more than 150 open labor contracts."

The city's comptroller, Scott Stringer, said "no one will know our true fiscal outlook" until the union contracts are resolved and joined the mayor in urging federal and state lawmakers to contribute more funding to the city.

De Blasio, a Democrat, has crafted a an everyman image for himself that varies greatly from the buttoned-down, data-driven billionaire Bloomberg, but he delivered his budget presentation much like his predecessor did: He stood in front of a wall of flags in the City Hall briefing room and used a PowerPoint slide presentation to go over the numbers, though unlike Bloomberg he at times deferred to his budget director on questions.

His budgetary priorities remained consistent with his campaign promises. The mayor said he intends to devote more resources to public housing repairs and maintenance, and he plans to expand services for homeless young people and cap rent contributions for those who have HIV and AIDS. But in the context of the massive budget, those expenditures appear relatively modest and the inherited surplus allowed de Blasio to avoid making broad cuts.

He also added $35 million into the current year's budget to help with the winter's ongoing series of fierce snowstorms.

The center of his agenda remains a tax hike on wealthy New Yorkers to fund universal prekindergarten. The revenue that would be raised by that hike, $530 million, was included in the budget even though the tax must be authorized by state legislators and appears to be in jeopardy. A top Republican lawmaker suggested this week that he would not even bring the tax hike to a vote while Gov. Andrew Cuomo has said he would prefer to pay for prekindergarten with money in the state budget.

De Blasio also said they he would "end the budget dance," which he deemed the seemingly routine threats made by the Bloomberg administration to cut services, including firehouses and libraries, only to have funding restored by the city council at a later date. He also pledged to have a better budgetary process with the largely Democratic council, which often had an adversarial relationship with Bloomberg, a Republican-turned-independent.

The speaker of the council, Melissa Mark-Viverito, released a statement saying the budget was a "good start." Council budget hearings will begin in the next few weeks followed by a revised mayoral budget in April before a final deal is struck by June. The budget covers the fiscal year that starts July 1.

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